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HomeMy WebLinkAboutContract 40520CITY SECRETARY CONTRACT N0. 4 � K�►[� 17 % iC� 1 1/ °� ► ' ' : �71f7 1� % I_�- : D ►I ► 1 This ECONOMIC DEVELOPMENT PROGRAM AGREEMENT ("Agreement") is entered into by and between the CITY OF FORT WORTH, TEXAS he "City"), a home rule municipality organized under the laws of the State of Texas; RADIOSHACK CORPORATION ("RadioShack"), a Delaware corporation; and TE ELECTRONICS LP ("TE"), a Delaware limited partnership whose general partner is RadioShack. RECITALS The City, RadioShack and TE hereby agree that the following statements are true and correct and constitute the basis upon which the parties have entered into this Agreement: A. RadioShack currently leases a portion of property owned by Tarrant County College District in downtown Fort Worth (the "Downtown Site") for use as the RadioShack Corporate Headquarters (as defined herein). The City and RadioShack have entered into a separate Economic Development Program Agreement, as amended, pursuant to which the City will pay RadioShack certain annual economic development program grants in return for RadioShack's maintaining its corporate headquarters at the Downtown Site and certain annual employment and supply and service spending commitments connected therewith. Such Economic Development Program Agreement is a public document on file in the City Secretary's Office as City Secretary Contract No. 27982, as amended by City Secretary Contract No. 27982-A1 (the "Original EDPA"). B. The Original EDPA and other RadioShack Incentive Agreements (as defined in Section 2 hereof), other than this Agreement, have been structured so that payments received by RadioShack thereunder do not exceed amounts owed to RadioShack for infrastructure funded and constructed by RadioShack pursuant to that certain Development Agreement between RadioShack and the Board of Directors of Tax Increment Reinvestment Zone Number Six, City of Fort Worth, Texas, dated on or about September 13, 2004, as amended, and that certain Development Agreement between RadioShack and the Board of Directors of Tax Increment Reinvestment Zone Number Six, City of Fort Worth, Texas, dated on or about July 15, 2005, as amended (collectively, the "TIF Agreements"), Once RadioShack has been paid such amounts, this Agreement will be the only RadioShack Incentive Agreement to remain in effect. C. As recommended by the 2010 Comprehensive Plan, adopted by the City Council pursuant to Ordinance No. 19044-02-2010, and in accordance with Resolution o. 3716-03-2009, the City has established an economi Nc development program pursuant to which the City will, on a case -by -case basis, offer economic development incentive Page 1 Economic Development Program Agreement between City of Fort Worth, TE Electronics LP, and RadioShack Corporation 0 6 - 3 0 -1 0 P 0 3 ' 0 7 IN packages authorized by Chapter 380 of the Texas Local Government Code that include monetary loans and grants of public money, as well as the provision of personnel and services of the City, to businesses and entities that the City Council determines will promote state or local economic development and stimulate business and commercial activity in the City in return for verifiable commitments from such businesses or entities to cause specific employment and other public benefits to be made or invested in the City the 11380 Program"). D. As part of the 380 Program, the City wishes to provide certain economic development incentives to TE, a Delaware limited partnership whose general partner is RadioShack, in return for RadioShack's and TE's commitment to cause additional City sales taxes to be generated and for RadioShack's commitment to maintain its corporate headquarters in the City, as more specifically set forth in this Agreement. The City Council recognizes the economic importance to the City of RadioShack's current corporate headquarters operations in the City and wishes to retain that presence in the City. In addition, the additional City sales taxes that will be generated as a result of the commitments made by TE and RadioShack pursuant to this Agreement will immediately benefit the City's Crime Control and Prevention District and, after the Infrastructure Pay- back Date (as defined in Section 2 hereof), the City's general fund. E. This Agreement is authorized by Chapter 380 of the Texas Local Government Code. NOW, THEREFORE, in consideration of the mutual benefits and promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: AGREEMENT 1. INCORPORATION OF RECITALS. The City Council hereby finds, and the City, RadioShack and TE hereby agree, that the recitals set forth above are true and correct and form the basis upon which the parties have entered into this Agreement. 2. DEFINITIONS. In addition to terms defined in the body of this Agreement, the following terms shall have the definitions ascribed to them as follows: 380 Program has the meaning ascribed to it in Recital C hereof. Page 2 Economic Development Program Agreement between City of Fort Worth, TE Electronics LP, and RadioShack Corporation e Affiliate means all entities, incorporated or otherwise, under common control with, controlled by or controlling an entity. For purposes of this definition, "control" means fifty percent (50%) or more of the ownership determined by either value or vote. Casualty Event means the complete or partial destruction of RadioSha%/ 0 Corporate Headquarters at a location or locations in the City resulting from an identifiable event of a sudden, unexpected, or unusual nature, such as flood, windstorm, or fire, that prevents RadioShack from using such location or locations as its Corporate Headquarters in its ordinary and customary manner, following which (i) if the Corporate Headquarters is located at the Downtown Site, substantial completion of the restoration of the Downtown Site shall be undertaken in accordance with the applicable lease agreement between RadioShack and Tarrant County College District, and RadioShack shall recommence use of the Downtown Site as its Corporate Headquarters within such time as is reasonably practical or (ii) otherwise, RadioShack shall, within ninety (90) calendar days of such Casualty Event, initiate or cause to be initiated continuous repairs, construction, or reconstruction at a location or locations in the corporate limits of the City necessary to restore, build or rebuild its Corporate Headquarters. Comptroller Approval means a private letter ruling from the Texas Comptroller of Public Accounts indicating that, under a factual scenario substantially similar to RadioShack's and TE's plans to consummate TE-RadioShack Taxable Sales in the City in accordance with this Agreement, that the City would be a "place of business of the retailer" (with TE being the "retailer"), as that definition is used in Section 321.002(a)(3) of the Texas Tax Code, or that such sales would be consummated in the City, as that term is used in Section 321.203 of the Texas Tax Code; provided that such private letter ruling will not specifically identify TE, RadioShack or the City by name. Effective Date has the meaning ascribed to it in Section 3 hereof. Excluded TE Sales Tax Revenues means (i) TE Sales Tax Revenues whose use is restricted by any state law adopted after the Effective Date of this Agreement and that would otherwise be available for the Program under the state laws in effect on the Effective Date of this Agreement and (ii) the amount of TE Sales Tax Revenues received by the City attributable to TE-RadioShack Taxable Sales in calendar year 2009, if any. Infrastructure Pay -back Date means the earlier of December 31, 2016 or the date as of which RadioShack has received the gross sum of Ten Million Seven Hundred Sixty-six Thousand Five Hundred Fourteen and No/100 Dollars ($10,766,514.00) pursuant to the RadioShack Incentive Agreements, beginning with any payments made during calendar year 2010. The Original EDPA and the TIF Agreements will expire on the Infrastructure Pay -back Date. Original EDPA has the meaning ascribed to it in Recital A hereof. Program means the economic development program established and outlined in this Agreement as part of the City's 380 Program. Page 3 Economic Development Program Agreement between City of Fort Worth, TE Electronics LP, and RadioShack Corporation Program Grants means the economic development grants paid by the City to TE in accordance with this Agreement and as part of the Program. RadioShack Business Partner means a business with which RadioShack or an Affiliate of RadioShack regularly conducts business, including, but not limited to, telephone carriers, other vendors, franchisees, and landlords/lessors, but excluding retail store customers of RadioShack or any Affiliate of RadioShack. RadioShack Corporate Headquarters means RadioShack's primary administrative office at which the Chief Executive Officer, Chief Financial Officer, and other senior staff overseeing RadioShack's strategic planning, corporate communications, tax and legal, marketing, finance, human resources, and information technology matters are located. RadioShack Incentive Agreements means, collectively, this Agreement, the Original EDPA, and the TIF Agreements. Records has the meaning ascribed to it in Section 4.3 hereof. Renewal Term has the meaning ascribed to it in Section 3 hereof. Sales Tax Certificate means a certificate or other statement in a form reasonably acceptable to the City setting forth TE's collection of sales and use tax imposed by the City and remitted to the State of Texas for TE-RadioShack Taxable Sales consimlmated in the City in any given month during the Term or any Renewal Term, as more specifically outlined in Section 4.2. Taxable Items shall have the same meaning assigned by Chapter 151 of the Texas Tax Code, as amended. TE-RadioShack Taxable Sales means sales consummated in the City in accordance with Section 321.203 of the Texas Tax Code by TE to RadioShack or a RadioShack Business Partner of Taxable Items associated with the general business operations of RadioShack and any Affiliate thereof, including, without limitation, supplies, software, equipment, fixtures, signage, and other items used or for which the benefit is derived at the RadioShack Corporate Headquarters, RadioShack's distribution centers, or RadioShack's retail stores. TE Sales Tax Revenues means a one percent (1%) available municipal sales tax, such as the one percent (1 %) tax presently in effect pursuant to Texas Tax Code § § 321.101(a) and 321.103, resulting from sales tax received by the City and collected by TE on TE-RadioShack Taxable Sales. TE Sales Tax Revenues specifically exclude (i) the Crime Control District Sales Tax imposed by the City pursuant to Texas Tax Code § 323.105 and Local Government Code § 363.005, and (ii) the Transit Authority Sales Tax paid to the City by the Fort Worth Transportation Authority pursuant to City Secretary Page 4 Economic Development Program Agreement between City of Fort Worth, T`E Electronics LP, and RadioShack Corporation 0 Contract No. 19689, as previously or subsequently amended or restated, from sales tax imposed by the Fort Worth Transportation Authority pursuant to Texas Tax Code Chapter 322; and (iii) Excluded TE Sales Tax Revenues, if any. If the City ever charges less than a one percent (1%) available sales tax, then TE Sales Tax Revenues shall be computed to reflect that lesser percentage. If the City ever charges less than a one percent (1%) available sales tax and then subsequently adds a sales tax that increases such lower percentage and whose use is not otherwise controlled or regulated, in whole or in part, by another governmental entity, authority or applicable law, ordinance, rule or regulation, then TE Sales Tax Revenues shall be computed to reflect that increased percentage up to a maximum aggregate of one percent (1%). Notwithstanding anything to the contrary herein, in no event does TE Sales Tax Revenues include any sales taxes received on account of sales consummated at RadioShack's or an Affiliate's retail stores in the City. Term has the meaning ascribed to it in Section 3 hereof. TIF Agreements has the meaning ascribed to it in Recital B hereof. True -up Amount has the meaning ascribed to it in Section 5.4 hereof. 3. TERM This Agreement shall be effective on the later date as of which (i) the City, RadioShack and TE have all executed this Agreement and (ii) RadioShack has delivered a fully executed copy of a lease between RadioShack and Tarrant County College District for certain property in downtown Fort Worth identified in that certain Economic Development Program Agreement between the City and Radio Shack on file in the City Secretary's Office as City Secretary Contract No. 27982, as amended, that contains all terms and conditions set forth in Exhibit "A", attached hereto and hereby made a part of this Agreement for all purposes (the "Effective Date") and shall expire on the fifteenth (15th) anniversary thereof, unless terminated earlier as provided by and in accordance with this Agreement (the "Term"); provided, however, that all parties hereto may collectively and in writing renew this Agreement for two (2) successive terms of five (5) years each (each a "Renewal Term"). Any obligation of a party arising prior to expiration or termination of this Agreement, either during the Term or a Renewal Term, shall survive the expiration or termination. 4. OBLIGATIONS AND COMMITMENTS OF RADIOSHACK AND TE. 4.1. Maintenance of RadioShack Corporate Headquarters in the City. Throughout the Term and any Renewal Term of this Agreement, RadioShack shall continually use a location or locations within the corporate limits of the City as the RadioShack Corporate Headquarters. TE and Page 5 Economic Development Program Agreement between City of Fort Worth, 'I`E Electronics LP, and RadioShack Corporation RadioShack understand and agree that Section 10 of this Agreement prohibits an assignment of the rights or obligations under this Agreement by either TE or RadioShack without the advance written consent of the City. 4.2. Sales Tax Certificates. TE shall provide the City with a Sales Tax Certificate for each month during the Term and any Renewal Term within sixty (60) calendar days following the last day of the month covered by the Sales Tax Certificate. TE shall also provide the City with any additional supporting documentation reasonably required by the City to verify TE Sales Tax Revenues for purposes of calculating the amount of Program Grants payable pursuant to this Agreement. The Sales Tax Certificate shall at a minimum contain, include or be accompanied by the following: 4.2.1. A copy of ali sales and use tax returns and reports, sales and use tax prepayment returns, direct payment tax returns and reports, if any, sales and use tax audit assessments, including amended sales and use tax returns or reports, filed by TE for the applicable month showing sales and use tax collected (including sales and use tax imposed by the City and paid directly to the State of Texas pursuant to a direct payment certificate) by TE for T&RadioShack Taxable Sales consolidated in the City during that month; and 4.2.2. Information concerning any refund or credit received by TE of sales or use tax paid or collected by TE (including any sales and use tax paid directly to the State of Texas pursuant to a direct payment permit) which has previously been reported by TE as sales and use tax paid or collected for TE-RadioShack Taxable Sales consummated in the City during a previous month. 4.3. Audits. The City, at its own cost and expense, will have the right throughout the Term and any Renewal Term to audit the financial and business records of TE or RadioShack that relate to the terms and conditions of this Agreement or that contain information necessary for the City to calculate or verify any Program Grant payable hereunder (collectively, the "Records"). TE and RadioShack shall make all Records available to the City at the RadioShack Corporate Headquarters in the City or at another location in the City acceptable to the parties following at least seven (7) calendar days' advance notice by the City and shall otherwise cooperate fully with the City during any audit. Page 6 Economic Development Program Agreement between City of Fort Worth, TE Electronics LP, and RadioShack Corporation 4.4. Comptroller Approval. At the City's request, in, at no cost to Lite City, shall obtain Comptroller Approval of this Agreement. 5. PROGRAM GRANT PAYMENTS. Subject to Section 6 and all other terms and conditions of this Agreement, TE will be entitled to receive from the City a monthly Program Grant in an amount equal to a percentage of TE Sales Tax Revenues for that month, as verified from the Sales Tax Certificate covering that month that is filed by TE in accordance with Section 4.2 and as calculated in accordance with this Section 5. 5.1. From Effective Date Until Infrastructure Pay -back Date. The City will pay TE monthly Program Grants equal to one hundred percent (100%) of the TE Sales Tax Revenues beginning with the first full month following the Effective Date and ending with the month in which the Infrastructure Pay -back Date occurs; provided, however, that if payment of a Program Grant pursuant to and in accordance this Agreement in any given month would cause RadioShack to receive an amount in excess of the gross sum of Ten Million Seven Hundred Sixty-six Thousand Five Hundred Fourteen and No/100 Dollars ($10,766,514.00) pursuant to the RadioShack Incentive Agreements, beginning with any payments made during calendar year 2010, then the amount of such Program Grant shall be reduced to equal such amount as is necessary for RadioShack to receive no more than the gross sum of Ten Million Seven Hundred Sixty-six Thousand Five Hundred Fourteen and No/100 Dollars ($10,766,514.00) pursuant to the RadioShack Incentive Agreements, beginning with any payments made during calendar year 2010. In such an event, any remaining TE Sales Tax Revenues attributable to that month shall be included in the calculation of the next month's Program Grant in accordance with Section 5.2 hereof. 5.2. After Infrastructure Pay -back Date . Subject to Section 5.1, the City will pay TE monthly Program Grants equal to fifty percent (50%) of the TE Sales Tax Revenues beginning with the first full month following the month in which the Infrastructure Pay -back Date occurs and each month thereafter for the remainder of the Term and any Renewal Term. The City will retain the remaining fifty percent (50%) of TE Sales Tax Revenues, which may be used by the City for any purpose. Page 7 Economic Development Program Agreement between City of Fort Worth, TE Electronics LP, and RadioShack Corporation 5.3. Deadline for Payments. Program Grants payable for each month pursuant to and in accordance with this Agreement shall be paid to TE within sixty (60) calendar days following receipt by the City of the Sales Tax Certificate covering such month. 5.4. True -ups on Basis of Amended Returns; Refunds. In the event that TE files an amended sales and use tax return or report for TE-RadioShack Taxable Sales or the State of Texas determines that (1) additional sales and use tax is due and owing from TE-RadioShack Taxable Sales consummated in the City or (ii) the amount of TE Sales Tax Revenues received by the City in a given month exceeds the amount of TE Sales Tax Revenues that the City should have received in that month, then the following Program Grant payable by the City shall be increased or decreased, as the case may be, by the collective difference between the amount of TE Sales Tax Revenues used to calculate the affected Program Grant or Grants and the amount of TE Sales Tax Revenues that the City actually received in the affected month or months (a "True -up Amount"). In the event that either TE or the City is unable to recover the True -up Amount due to the termination, expiration or impending expiration of this Agreement, then (1) the City shall be obligated to continue making Program Grants, calculated in accordance with this Agreement until TE has received all True -up Amounts owed and (ii) TE shall be obligated to reimburse the City the full True -up Amount within thirty (30) calendar days' advance written notice from the City. 5.5. Retention by City of Excluded TE Sales Tax Revenues. TE understands and agrees that any Excluded TE Sales Tax Revenues shall be retained and used by the City for any lawful purpose and will not be available for the Program or used to calculate the payment of any future Program Grants to TE. 5.6. Source of Program Grant Funds. Notwithstanding anything to the contrary herein, it is understood and agreed that all Program Grants paid pursuant to this Agreement shall come from currently available general revenues of the City and other legally available sources, and not directly from TE Sales Tax Revenues received by the City. 5.7. Change in Law. If during the term of this Agreement state law applicable to municipal taxation changes and, as a result, the amounts of the Program Grants payable hereunder differ materially from the amounts which would have been calculated if Page 8 Economic Development Program Agreement between City of Fort Worth, TE Electronics LP, and RadioShack Corporation state law had remained the same as in effect on the Effective Date, then the parties shall endeavor to adjust the Program Grant computation so as to achieve the same proportionate economic benefits to TE and the City as would have resulted if the law had not changed. Notwithstanding anything to the contrary herein, any adjustment negotiated pursuant to this Section 5.7 is subject to the approval of the City's City Council in an open meeting conducted in accordance with Chapter 551 of the Texas Government Code and is not binding on either party unless an amendment to this Agreement is executed by all parties. 6. DEFAULT; TERMINATION. 6.1. Failure to Maintain RadioShack Corporate Headquarters in the City; Liquidated Damalles. TE and RadioShack understand and agree that if RadioShack fails to use a location or locations in the City's corporate limits for the RadioShack Corporate Headquarters, as specified in Section 4.1 of this Agreement, for seven (7) calendar days or more in any calendar year during the Term or any Renewal Term of this Agreement (other than a temporary cessation of use due to a Casualty Event), the City will have the right to terminate this Agreement immediately by providing written notice to TE and RadioShack. RadioShack's failure to use the Downtown Site for the RadioShack Corporate Headquarters constitutes an event of default under the Original EDPA, but shall not constitute a default under this Agreement so long as RadioShack uses another location or locations in the City for the RadioShack Corporate Headquarters. In addition, RadioShack recognizes that a portion of the consideration under this Agreement is the economic benefit brought to the City by virtue of RadioShack's operation of its Corporate Headquarters in the City, especially in the first five (5) years of the Term of this Agreement. Accordingly, RadioShack understands and agrees that the failure of RadioShack to use a location or locations within the corporate limits of the City as the RadioShack Corporate Headquarters during those first five (5) years, and the resulting loss of jobs in the current economic climate, will harm and have a negative economic impact on the City, and RadioShack agrees that the amount of actual damages resulting therefrom are speculative in nature and will be difficult or impossible to ascertain. Therefore, upon termination of this Agreement for failure by RadioShack to use a location or locations in the City as its Corporate Headquarters at any time on or before June 30, 2015, RadioShack agrees to reimburse the City, as liquidated damages and not as a penalty, the following amounts: (a) If RadioShack fails to use a location or locations in the City as the RadioShack Corporate Headquarters for seven (7) calendar days at any time between and including June 9, 2010 and June 30, 2012, RadioShack shall Page 9 Economic Development Program Agreement between City of Fort Worth, TE Electronics LP, and RadioShack Corporation reimburse the City one hundred percent (100%) of all Program Grants paid pursuant to this Agreement after January 1, 2010. (b) If RadioShack fails to use a location or locations in the City as the RadioShack Corporate Headquarters for seven (7) calendar days at any time between and including July 1, 2012 and June 30, 2013, RadioShack shall reimburse the City seventy-five percent (75%) of all Program Grants paid pursuant to this Agreement after January 1, 2010. (c) If RadioShack fails to use a location or locations in the City as the RadioShack Corporate Headquarters for seven (7) calendar days at any time between and including July 1, 2013 and June 30, 2014, RadioShack shall reimburse the City fifty percent (50%) of all Program Grants paid pursuant to this Agreement after January 1, 2010. (c� If RadioShack fails to use a location or locations in the City as the RadioShack Corporate Headquarters for seven (7) calendar days at any time between and including July 1, 2014 and June 30, 2015, RadioShack shall reimburse the City twenty-five percent (25%) of all Program Grants paid pursuant to this Agreement after January 1, 2010. The City and RadioShack agree that such amounts are a reasonable approximation of actual damages that the City will incur as a result of RadioShack's failure to use a location or locations in the City as the RadioShack Corporate Headquarters throughout the Term of this Agreement and that this provision is intended to provide compensation for actual damages and is not a penalty. The provisions of this Section 6.1 shall survive any termination of this Agreement. 6.2. Failure to Submit Sales Tax Certificates. For any month in which TE fails to submit a Sales Tax Certificate, as required by and in accordance with Section 4.2, the City's obligation to pay TE a Program Grant for that month pursuant to this Agreement shall be suspended until the City has received such Sales Tax Certificate. If TE fails to submit a Sales Tax Certificate for three (3) consecutive months, Section 6.3 shall apply. 6.3. In General. Unless stated elsewhere in this Agreement, TE shall be in default under this Agreement if TE or RadioShack breaches any term or condition of this Agreement. In the event that such breach remains uncured after thirty (30) calendar days following receipt of written notice by the City referencing this Agreement (or, if TE or RadioShack has diligently and continuously attempted cure following receipt of such written notice but reasonably requires more than thirty (30) calendar days to cure, then such additional amount of time as is Page 10 Economic Development Program Agreement between City of Fort Worth, TE Electronics LP, and RadioShack Corporation reasonably necessary to effect cure, as determined collectively by all parties in good faith), the City shall have the right to terminate this Agreement immediately by providing written notice to TE and RadioShack. 6.4. By Mutual Agreement. The parties may terminate this Agreement by mutual written agreement. 7. INDEPENDENT CONTRACTOR. It is expressly understood and agreed that TE and RadioShack shall operate as independent contractors in each and every respect hereunder and not as agents, representatives or employees of the City. TE and RadioShack shall have the exclusive right to control all details and dayAo-day operations relative to their respective functions and duties, and shall be solely responsible for the acts and omissions of their officers, agents, servants, employees, contractors, subcontractors, licensees and invitees. TE and RadioShack acknowledge that the doctrine of respondeat superior will not apply as between the City and TE or RadioShack, their officers, agents, servants, employees, contractors, subcontractors, licensees, and invitees. TE and RadioShack further agree that nothing in this Agreement will be construed as the creation of a partnership or joint enterprise between the City and TE or RadioShack. 8. INDEMNIFICATION. RADIOSHACK AND TE SHALL BE LIABLE FOR AND HEREBY AGREE TO DEFEND, INDEMNIFY AND HOLD THE CITY, ITS OFFICERS, AGENTS AND EMPLOYEES, HARMLESS AGAINST ANY AND ALL CLAIMS, LAWSUITS, COSTS AND EXPENSES FOR PERSONAL INJURY (INCLUDING DEATH), PROPERTY DAMAGE OR OTHER HARM FOR WHICH RECOVERY OF DAMAGES IS SOUGHT THAT MAY ARISE OUT OF OR BE OCCASIONED BY TE'S OR RADIOSHACK'S BREACH OF ANY OF THE TERMS OR PROVISIONS OF THIS AGREEMENT, OR BY ANY NEGLIGENT OR GROSSLY NEGLIGENT ACT OR OMISSION, MALFEASANCE OR MISCONDUCT OF RADIOSHACK OR TE OR ANY AFFIL]ATE, THEIR OFFICERS, AGENTS, ASSOCIATES, EMPLOYEES, CONTRACTORS (OTHER THAN THE CIT19 OR SUBCONTRACTORS, IN THE PERFORMANCE OF THIS AGREEMENT; EXCEPT THAT THE INDEMNITY PROVIDED FOR IN THIS PARAGRAPH SHALL NOT APPLY TO ANY LL4BILITY RESULTING FROM THE SOLE NEGLIGENCE OF CITY, ITS OFFICERS, AGENTS, EMPLOYEES OR SEPARATE CONTRACTORS, AND IN THE EVENT OF JOINT AND CONCURRENT NEGLIGENCE OF SOME OR ALL OF THE PARTIES, RESPONSIBILITY, IF ANY, SHALL BE APPORTIONED COMPARATIVELY IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. Page 11 Economic Development Program Agreement between City of Fort Worth, TE Electronics LP, and RadioShack Corporation 9. NOTICES. All written notices called for or required by this Agreement shall be addressed to the following, or such other party or address as either party designates in writing, by certified mail, postage prepaid, or by hand delivery: City: City of Fort Worth Attn: City Manager 1000 Throckmorton Fort Worth, TX 76102 with copies to: the City Attorney and Housing and Economic Development Director at the same address TE: TE Electronics LP c/o RadioShack Corporation Attn: VP, General Counsel & Corporate Secretary 300 RadioShack Circle, MS C174401 Fort Worth, TX 76102 with a copy to: E. Brad Mahon Murphy Mahon Keffler Farrier, LLP Tindall Square Building No. 2 505 Pecan St., Suite 101 Fort Worth, TX 76102 RadioShack: RadioShack Corporation Attn: VP, General Counsel & Corporate Secretary 300 RadioShack Circle, MS C174401 Fort Worth, TX 76102 with a copy to: E. Brad Mahon Murphy Mahon Keffler Farrier, LLP Tindall Square Building No. 2 505 Pecan St., Suite 101 Fort Worth, TX 76102 The City, TE and RadioShack may change their addresses for notice specified above by providing the other parties with thirty (30) days' advance written notice of such change of address. 10. ASSIGNMENT AND SUCCESSORS. This Agreement shall be binding on and inure to the benefit of the parties, their respective successors and assigns; provided, however, that neither RadioShack nor TE Page 12 Economic Development Program Agreement between City of Fort Worth, T`E Electronics LP, and RadioShack Corporation may convey, transfer or otherwise assign all or any part of their rights and obligations hereunder without the advance written consent of the City. 11. COMPLIANCE WITH LAWS, ORDINANCES, RULES AND REGULATIONS. This Agreement will be subject to all applicable federal, state and local laws, ordinances, rules and regulations, including, but not limited to, all provisions of the City's Charter and ordinances, as amended. 12. GOVERNMENTAL POWERS. It is understood that by execution of this Agreement, the City does not waive or surrender any of its governmental powers or immunities. 13. NO WAIVER. The failure of a parry to insist upon the performance of any term or provision of this Agreement or to exercise any right granted hereunder shall not constitute a waiver of that party's right to insist upon appropriate performance or to assert any such right on any future occasion. 14. VENUE AND JURISDICTION. If any action, whether real or asserted, at law or in equity, arises on the basis of any provision of this Agreement, venue for such action shall lie in state courts located in Tarrant County, Texas or the United States District Court for the Northern District of Texas — Fort Worth Division, This Agreement shall be construed in accordance with the laws of the State of Texas. 15. NO THIRD PARTY RIGHTS. The provisions and conditions of this Agreement are solely for the City, TE and RadioShack, and any assign or successor thereof to whicl consented in accordance with Section 10 of this Agreement, and are n create any rights, contractual or otherwise, to any other person or entity. Page 13 Economic Development Program Agreement between City of Fort Worth, TE Electronics LP, and RadioShack Corporation benefit of the the City has t intended to 1us INTERPRETATION. In the event of any dispute over the meaning or application of any provision of this Agreement, this Agreement shall be interpreted fairly and reasonably, and neither more strongly for or against any party, regardless of the actual drafter of this Agreement. 17. CAPTIONS. Captions and headings used in this Agreement are for reference purposes only and shall not be deemed a part of this Agreement. 18. ENTIRETY OF AGREEMENT. This Agreement, including any exhibits attached hereto and any documents incorporated herein by reference, contains the entire understanding and agreement between the City, RadioShack, and TE as to the matters contained herein. Any prior or contemporaneous oral or written agreement is hereby declared null and void to the extent in conflict with any provision of this Agreement. Notwithstanding anything to the contrary herein, this Agreement shall not be amended unless executed in writing by both parties and approved by the City Council of the City in an open meeting held in accordance with Chapter 551 of the Texas Government Code. 19. COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which shall be considered an original, but all of which shall constitute one instrument. EXECUTED to take effect on the Effective Date: CITY OF FORT WORTH: Tom Higgins Assistant City Manager Date: byo k�endrix, City contract lnuthorization Pagel'' �l��I�b Economic Development Program Agreement between City of Fort. Worth, TE Electronics LP, and RadioShack CopdLeon F� C3 APPROVED AS TO FORM AND LEGALITY: By: Peter Vaky Assistant City Attorney TE ELECTRONICS LP, a Delaware limited partnership: By: RADIOSHACK CORPORATION, a Delaware corporation and its sole general partner, By:Z/Z� Name: Robert C. Donohoo Title: VP, General Counsel & Corporate Secretary Date: d �d Z U RADIOSHACK CORPORATION, a Delaware corporation: Name. Robert C. Donohoo Title: VP, General Counsel & Corporate Secretary Date: (� dILIZI Page 15 Economic Development Program Agreement between City of Fort Worth, TE Electronics LP, and RadioShack Corporation EXHIBIT "A" Lease Terms and Conditions That certain Amended and Restated Lease between Tarrant County College District and RadioShack, dated as of June 25, 2008, as previously amended by that certain First Amendment to Lease, dated as of March 11, 2010, shall be further amended (the "Second Amendment") as necessary to reflect the following terms and conditions: 1. RadioShack shall lease the Clear Fork Building and the West Fork Building (as those terms are defined in the Amended and Restated Lease) for an extended term expiring on June 30, 2016. 2. RadioShack may not terminate the Lease as of a date prior to June 30, 2015. If the Lease is terminated prior to June 30, 2015, RadioShack will be liable for payment of all Basic Rent, Additional Rent, and any other sums owed to Tarrant County College District under the Lease through June 30, 2015. 3. Annual Basic Rent for both the Clear Fork Building and the West Fork Building shall be $5,200,000.00. 4. Within thirty (30) days following the effective date of the Second Amendment, Tarrant County College District shall cause that certain lawsuit brought by Tarrant County College District in Cause No. 096-24292940, styled Tarrant County College District, Plaintiff v. Tarrant Appraisal District, Defendant, whereby Tarrant County College District is seeking a judicial determination that all or part of the Premises (as that term is defined in the Amended and Restated Lease) is exempt from ad valorem taxes, to be dismissed with prejudice. Page 16 Economic Development Program Agreement between City of Fort Worth, TE Electronics LP, and RadioShack Corporation City of Fort Worth, Texas Mayor and Councii C COUNCIL ACTION: Approved on 6/15/2010 unication DATE: Tuesday, June 15, 2010 REFERENCE NO.: C-24274 LOG NAME: 17RADIOSHACKPOS380 SUBJECT: Authorize Execution of Economic Development Program Agreement with RadioShack Corporation and TE Electronics LP RECOMMENDATION: It is recommended that the City Council authorize the City Manager to execute an Economic Development Program Agreement with RadioShack Corporation and TE Electronics LP in substantially the same form as that attached hereto. DISCUSSION: Under a separate Mayor and Council Communication item being considered separately by the City Council, City staff is recommending that the City Council authorize an amendment to that certain Economic Development Program Agreement between the City and RadioShack Corporation (City Secretary Contract No. 27982) (the Original EDPA). Under the proposed amendment to the Original EDPA, RadioShack will maintain its corporate headquarters, along with 400 full—time jobs with Fort Worth residents and 150 full—time jobs with Central City residents, at its downtown campus, which has been purchased by Tarrant County College District. RadioShack has also committed to expend at least $1.2 million each year with Fort Worth companies and $100,000.00 per year with minority —and women —owned businesses for supplies and services associated with the operation of its corporate headquarters. In return, the City will pay RadioShack annual economic development grants authorized by Chapter 380 of the Texas Local Government Code equal to 100 percent of real and personal property taxes received by the City that are attributable to RadioShack's corporate headquarters at the site until the earlier of (i) June 30, 2016 or (ii) the date as of which $10,766,514.00 has been paid pursuant to the Original EDPA, as amended; the two amended Development Agreements between RadioShack and the Riverfront TIF's board of directors (the TIF Agreements); and this proposed Economic Development Program Agreement between TE Electronics LP, RadioShack and the City. TE Electronics LP (TE) is a Delaware limited partnership based in Fort Worth that is controlled by RadioShack. Under the Economic Development Program Agreement that is proposed, RadioShack will cause TE to serve as the retail provider for all taxable items associated with the general business operations of RadioShack and its affiliates, including supplies, software, fixtures and signage, that are used at RadioShack's corporate headquarters and in the retail stores of RadioShack, its franchisees and affiliates. The sale of such items will result in the collection of sales taxes in Fort Worth that do not currently exist. As an incentive for RadioShack to maintain its corporate headquarters in the City, the City will pay TE economic development program grants equal to 100% of TE's sales tax revenues (excluding any amounts collected for the City's Crime Control and Prevention District or for the Fort Worth Transportation Authority) until the sum of $10,766,514.00 has been paid pursuant the Original EDPA, as amended; the TIF Agreements, as amended; and this Agreement. After that, the City will pay TE an amount equal to only 50% of those sales tax revenues, and the City will retain the other 50%. The term of this proposed Agreement is 15 years, which the parties can collectively agree to extend for two additional terms of 5 years each. If RadioShack ceases to use a location in the City as its corporate headquarters at any time during the term of the Agreement, the City will have the right to terminate the Agreement immediately. In addition, if RadioShack ceases to use a location in the City at its corporate headquarters on or before June 30, 2015, TE will be required to reimburse the City the following percentages of all Program Grants paid under this Agreement: • 100% if RadioShack ceases to use a location in the City as its corporate headquarters at any time between June 9, 2010 and June 30, 2012; • 75% if RadioShack ceases to use a location in the City as its corporate headquarters at any time between July 1, 2012 and June 30, 2013; • 50% if RadioShack ceases to use a location in the City as its corporate headquarters at any time between July 1, 2013 and June 30, 2014; and • 25% if RadioShack ceases to use a location in the City as its corporate headquarters at any time between July 1, 2014 and June 30, 2015. City staff anticipates that the operation of RadioShack's corporate headquarters, as that term is defined in the Agreement, will require a significant level of employment and local investment. However, unlike the Original EDPA, this Agreement does not require RadioShack to maintain a specific number of jobs at the site or to make minimum amounts of supply and service expenditures. RadioShack and TE may not convey, transfer or otherwise assign their rights under this Agreement without the advance written consent of the City. The RadioShack facility is located in COUNCIL. DISTRICT 9. FISCAL INFORMATION: The Financial Management Services Director certifies that this action will have no material effect on City funds. FUND CENTERS: TO Fund/Account/Centers CERTIFICATIONS: Submitted for City Manager's Office by: Originating Department Head: Additional Information Contact: ATTACHMENTS FROM Fund/Account/Centers Thomas Higgins (6192) Jay Chapa (5804) Guy Brown (7313) 1. 17RadioShack Point of Sale 380 6-10-10 Clean (21.DOC